The Kansas City metropolitan area economy has continued to expand at a time when the overall region has experienced an economic slowdown. Between March 2001 and March 2002, nonagricultural employment grew by 1 percent to 992,000 jobs. Growth in the trade and service sectors accounted for more than 90 percent of the increase during this period.

Local sources have noted that economic diversity in the local economy has helped Kansas City weather the current economic downturn. They cite as an example the limited overall adverse impact on the economy of Sprint Communications’ decision last fall to lay off 3,000 local telecommunications workers from the company’s world headquarters in Overland Park. Also important to the economy, and to the housing market north of the Missouri River, has been American Airlines’ decision to maintain TWA’s aircraft overhaul base at Kansas City’s main airport. The maintenance facility employs more than 2,000.

Single-family permit activity in the metropolitan area increased sharply during the first 3 months of 2002 compared with the same time period in 2001, up 21 percent to 2,462 units. The Kansas City Board of REALTORS^® reports that total home sales in the Kansas City metropolitan area are down slightly, approximately 0.5 percent, to 13,500 units through March 2002 compared with the same period a year ago. This total includes sales of 10,400 existing homes and 3,100 new homes. The median sales price for all units sold through March 2002 was $155,000, up 3 percent from a year ago. The median sales price of existing homes was $134,000, up 1 percent over the first 3 months of March 2001. The median sales price of new homes was $240,000, up 12 percent over the first 3 months of 2001.

Although single-family building activity continues to be strong in the area, multifamily activity slowed significantly during the first quarter of 2002. Multifamily permit activity declined by 83 percent to only 419 units compared with the same time period in 2001. The decline is in response to the addition of 5,000 units to the multifamily inventory in 2001, primarily in Johnson County. A total of 15,000 multifamily units have been permitted over the past 3 years in the metropolitan area. Approximately 12,000 of these new multifamily units are being built in Johnson County south and north of the southern loop of I–435 in the southern part of the metropolitan area.

Through March, the overall rental occupancy is 91 percent in the metropolitan area, and local sources have indicated that this rate will drop as newly permitted units are added to the inventory. At present approximately 81 percent of rental properties are offering concessions. Although one- and two-bedroom units are experiencing occupancy rates ranging from 89 to 93 percent, three-bedroom units are nearly fully occupied at 98 percent.

Housing in downtown Kansas City has received a big boost from the city’s plans to develop 10,000 units over the next 10 years. Overall occupancy is at 96 percent in the downtown area between Paseo and State Line Avenues and 51st Street and I–35. Within the River Market area of downtown, approximately 700 rental units have been built or are under development with an average monthly rent of approximately $800. Under development in the Library District of 10th and Baltimore Avenues are an additional 400 units, of which 300 will be marketrate units, 60 will be LIHTC units, and 40 will be condominiums. Rents for apartments in the Library District are expected to start at $750 a month for the market-rate units and the sale price for condos will range from $175,000 to $300,000.

Also important to Kansas City’s economic and housing development efforts is the newly built first phase of the Stowers Institute, a biomedical research facility located in the Country Club Plaza area. Developed with a $1.2 billion endowment, the newly completed Phase 1 of the facility employs approximately 150 scientists and additional personnel and is continuing to add staff. City officials and key business leaders plan for the Stowers Institute and the newly formed Life Sciences Institute to help establish Kansas City as a center for biomedical research and serve as an additional catalyst for overall economic and housing development.